I keep a little stuffed lion by my desk that I picked up at an investment advisor conference several years ago. I do it for two reasons. First is to remind myself that though I must take my client’s money very seriously, that I should never take myself too seriously. Kind of hard to do with a stuffed animal on your desk.
But I have a more important reason that I keep it. It’s to remind me that hunting is hard. A lion who is hunting may succeed in actually catching his prey maybe once in every 5 or 10 or 20 attempts. A nice juicy zebra doesn’t just wander on up and say “Please pounce on me”. This is exactly the same situation when hunting for stocks. There aren’t any easy to find bargains out there. And one must be prepared for a great deal of disappointment. You see a report on TV about a great sounding company. But it turns out they haven’t actually produced the product yet, it’s still in the development stage. Or a company is wonderfully profitable but then you learn that 50% of their sales comes from just one customer and there is no long term contract in place. Another company is doing great, but they’ve borrowed up to their eyebrows and just a couple of bad quarters could have them in serious trouble. And so on and so on.
It may take 5 or 10 or 20 hunts to bring down that ‘juicy zebra’. It requires patience and a willingness to fail much more often than you triumph. But in the long run that’s how the lion and the smart investor succeed.